Mexico: Amendments to the Hydrocarbons Law

On May 4, 2021, the Ministry of Energy published, in the Federal Official Gazette, the decree amending the Hydrocarbons Law (the «Decree»). The Decree was published following the bill to amend the aforementioned law filed by the Federal Executive before the Congress, which was approved by a majority vote of both Chambers.

The Decree intends to reverse the energy reform enacted by the end of the year 2013, which main purpose was the opening of a free market and to promote free competition. Notwithstanding the foregoing, the Decree aims to reposition Petróleos Mexicanos («Pemex», for its acronym in Spanish) as the major participant in the market, granting it advantages in detriment of other participants.

In this line of thinking, the Decree presents serious risks of unconstitutionality in matters of economic competition, free competition, discriminatory treatment, legality, and legal certainty, retroactivity, respect for fundamental rights, among others, due to the fact that the Federal government is aiming to implement mechanisms and instruments that benefit Pemex over other participants of the market, in order for the State to regain control in the energy sector and rescue Pemex.

There are arguments and legal defense mechanisms for the participants and affected parties in order to maintain and respect the balance and certainty of the regulatory framework currently in force in the sector, fulfilling the obligations and commitments that Mexico has assumed in terms of climate change, investment protection, principles applicable to economic competition and other applicable matters.

Our energy practice lawyers have broad experience in the regulatory and contractual analysis of projects and collaborate closely with our antitrust, administrative, civil, commercial, and arbitration litigation teams, offering an integral service that includes ad hoc defense strategies and full knowledge of the available means of defense.

For further information in connection with this matter, please contact the partner in charge of your matters or one of the attorneys mentioned as follows:

Mexico City Office

Mr. Juan Carlos Machorro G. (Partner)

Tel.:+52 55 5279.5400

Monterrey Office

Mr. César Cruz A. (Partner)

Tel.:+52 81 8133.6000

Queretaro Office

Mr. José Ramón Ayala A. (Partner)

Tel.:+52 442 290.0290